EU quotas on CO2 emissions by non-European airlines will lead to increase in airfares

February 21, 2012, 18:32 UTC+3European unilateral decision to set quotas will increase airlines' operating costs and eventually result in a new wave of airfare hikes

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MOSCOW, February 21 (Itar-Tass) —— Unilateral quotas of the European Commission on CO2 emissions by non-European airlines will cause a growth of airfares, Russian Transport Minister Igor Levitin said at an international conference on the reduction of CO2 emissions of civil airlines in Moscow.

Delegates of 32 states are attending the forum.

“We think that CO2 emission duties and other environmental protection measures must be a decision taken by consensus, within the ICAO,” the minister said.

European unilateral decision to set quotas will increase airlines' operating costs and eventually result in a new wave of airfare hikes, the minister said. As a result, the demand for air transportation will decrease, he noted.

Moscow thinks that the step of the European Commission violates the Chicago Convention on International Civil Aviation and calls the mechanism of distribution of funds raised in the selling of CO2 emission quotas non-transparent.

The Russian government “shares the position of China and the United States,” Levitin said. “I think it would be premature to include civil aviation in the trading of CO2 emission quotas. It is necessary to suspend the application of the [EU] directive with regards to airlines of non-EU member countries until the elaboration of a coordinated position,” he said.

Russia is already working on the reduction of CO2 emissions by airlines, he said. Airlines are rapidly modernizing, which keeps the CO2 emissions on the level of 2008 despite the air traffic growth by 40%, the minister said.

Civil airlines were included in the European trading of CO2 emission quotas on January 1, 2012. European laws say that airlines travelling through the European air space must pay for CO2 emissions.

The quotas are set by the following principle: 85% of the airline’s air traffic in 2010 is exempt from duties while emissions above that amount must be paid for.

Experts say that Russian airlines will pay $20-25 million for C02 emission quotas in Europe this year alone, and the sum will continue to grow with the reduction of the duty-free emissions and the enlarged air traffic.